How to manage the challenges of an ageing workforce

The impacts of Australia’s ageing workforce will be so pronounced the government has budgeted for retraining. What can HR do?

In between the tax cuts and promises to return to surplus, you may have noticed that one of the centrepieces of the 2018 budget released this week was increased funding to assist Australia’s ‘greying’ population.

The measures include $17.4 million over four years to establish the Skills Checkpoint for Older Workers program, and $189.7 million over five years to support mature age workers adapting to the transitioning economy (see here for a more thorough breakdown).

We thought this would be an opportune time to explore the implications of an ageing workforce for employers.

Australia’s ageing population

According to the 2016 census, nearly one in every six people in Australia (16%) were aged 65 and over. Australia’s ageing population has significantly increased over the past century and is expected to continue, with estimates showing that by the end of the next decade, one in three Australians will be aged over 55.

The retirement age in Australia is also changing. Although the traditional and informal retirement age in Australia has been 65 years of age, the proportion of people in the labour force aged 65 years and over has been steadily increasing. From 2006 to 2016, the proportion of people in the labour force aged 55 and over increased by 13%.

These trends, together with today’s high cost of living and inevitable increases in the eligible age for receipt of Australia’s age pension, indicate that the number of older Australians participating in the labour force will continue to rise. At the same time, as Australia’s demographics continue to change, it will also become necessary for businesses to engage and retain mature-age workers to reduce the impact of a large non-working population on the economy and welfare system.

What does the ageing population mean for employers?

Multi-generational workforce

Firstly, for the first time in history, there may now be four or even five generations of people working together. The differing work values and expectations between each generation can create all kinds of management and intergenerational conflicts for organisations. Are the “youth” optimistic, or naïve? Or are the “experienced” wise, or just set in their ways?

A range of differing workplace needs

Secondly, an ageing workforce means that employers now need to deal with the very real issue of how to manage and cater to the needs of older employees. While Australians are living and working longer and are healthier than ever, even the healthiest workers will be impacted as they experience age-related declines in speed, physical strength and cognitive ability. Additionally, mature-aged workers are likely to have a greater desire for flexible working arrangements in order, for example, to be able to care for ageing parents (a reality for many in their 50’s and 60’s) or to transition to retirement.

Acknowledging the needs of mature-aged workers and implementing suitable initiatives to accommodate these needs will benefit not only the employees but also their employers. Take BMW for example. When the luxury German automobile company realised that many of its workers who were the company’s most experienced at developing new production lines were becoming too old to physically cope with the demands of their jobs, it introduced simple modifications such as brighter lighting and seats so workers did not have to stand all day. This significantly improved productivity.

Increase in age based discrimination and unconscious bias

Finally, the increased proportion of mature-aged workers also increases the risk of age-based discrimination and unconscious bias towards older workers (particularly in recruitment practices and policies).

According to the Australian Human Rights Commission, more than one quarter of Australians aged over 50 have experienced some kind of age discrimination in the last couple of years, and four in ten organisations admitted that they would not employ persons aged over 65. While discrimination based on gender or race is often at the forefront of workplace strategies dealing with inclusion and diversity, age discrimination has until very recently received little attention. This is very likely to change given the participation levels of older workers in the workplace.

Strategies for managing the ageing workforce

To manage the inevitable changes to Australia’s demographics, employers need to start preparing for an ageing workforce and develop strategies to manage and retain older workers. There are a number of strategies that can assist employers in addressing these issues, as follows.

Undertaking an age audit and succession planning — by monitoring things such as the age of staff in particular areas and the age of people leaving, employers can best plan for future resourcing needs and the transfer of skills and knowledge.

Conducting training for managers and recruitment panels on unconscious age-related bias and stereotypes of older workers to tackle unlawful discriminatory practices and unconscious bias towards older people in the organisation.

Developing mentoring/coaching programs to promote skill transfer between younger and older workers, as well as training on managing and working within intergenerational teams to address the issues of working in multi-generational teams.

Developing flexible employment opportunities and conditions for older workers to accommodate their needs. This may include redesigning jobs to accommodate physical restraints, offering job-share arrangements and implementing phased retirement options.

Re-skilling older workers and investing in education programs that assist older workers to be more efficient and to harness new ways of working (such as utilising technology and social media).

Aaron Goonrey is a Partner and Jenni Mandel is a Lawyer in Lander & Rogers’ Workplace Relations & Safety practice. Aaron can be contacted at agoonrey@landers.com.au

Learn about the future of work from Lynda Gratton, bestselling author of ‘The 100-Year Life: Living and Working in an Age of Longevity’ and 50 other thinkers and speakers at the AHRI National Convention and Exhibition in Melbourne from 28 – 30 August. Registration closes 21 August – so sign up now!

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Older workers especially those over 65 will struggle with those attracted to fad management and fad learning and development.

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8 months ago

Guest

Carmel Ross

Thank you for a well-written and informative article about a very timely topic, it is helpful and relevant. Perhaps one reason employers avoid hiring staff aged 65 years and over (quoted as 40% from AHRC data) is the lack of a retirement age. At age 65 most staff are still competent and may not need a great deal of job redesign or retraining to keep them making a valuable contribution to the business. But as the article rightly points out, regardless of how well people care for themselves during their lifetime, some loss of functioning is the consequence of ageing,… Read more »

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8 months ago

Guest

Mary Tehan

Carmel Ross – “the heartbreaking reality employers can find themselves with is a staff member who is unaware of their declining job performance or who refuses to accept that it’s an issue” … this maybe a perception of the company but in my experience, they are just pursuing the conventional line within the existing company culture. Beware people who can’t see potential right in front of them regardless of age … they just might find themselves regretting their myopia and arrogance. So much going on under the radar away from these big oversized companies … such exciting times …

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8 months ago

Guest

Catherine Cahill

As with any concern regarding function, our primary obligation is to consider objective facts, not prevailing mythology. In this article and in these comments, people have stated as fact, that older people lose cognitive function. This has now been proven in many research studies of Brain Plasticity to simply be untrue. This acceptance of a myth as fact reminds me of the arguments in the 80’s about women simply not being capable of doing most jobs men did because of their biology. This prevailing wisdom was not based on fact, but it was very widely held – and held against… Read more »

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8 months ago

Guest

Carol

There is no apostrophe in 50s and 60s or any other decade. Get your punctuation right.